What Mercury Systems, Inc. told the SEC could break it.

Many of the key semiconductor and hardware components in Mercury's defense-electronics products — ASICs, static RAM, FPGAs, microprocessors and third-party chassis peripherals (single-board computers, power supplies, blowers) — are available only from single or limited sources, so a supplier disruption or end-of-life on any of these would interrupt production of its mission-critical subsystems.

“Application-Specific Integrated Circuits (“ASICs”), static random access memory, FPGAs, microprocessors and other third party chassis peripherals (single board computers, power supplies, blowers, etc.), are currently available only from a single source or from limited sources.”

Mercury imports components (e.g., FPGAs and other semiconductors) and is exposed to a 10% baseline U.S. tariff plus higher tariffs on specific goods; it must pay tariffs at import but may only recover them from customers later, if at all, pressuring operating cash flow and gross margins (no material impact in FY2025 but a flagged risk for FY2026).

“tariff adjustments include a 10% baseline tariff on all imports to the U.S., with higher tariffs on specific goods from a range of countries. Any significant increase in the price of our products due to increased costs may result in a reduction in demand from our customers at such higher prices.”